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Mackintosh v Johnson

Mackintosh v Johnson

Case [2013] VSCA 10 8 February 2013

Unconscionable Conduct

Gifts

Appeal

Trusts & Equity

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2011 0189

KIRSTEN LEIGH MACKINTOSH	Appellant
	v
CHRISTOPHER RICHARD JOHNSON and STEPHEN ALEXANDER JOHNSON (as executors of the estate of RICHARD JOHN JOHNSON)	Respondents

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JUDGES	BUCHANAN and WHELAN JJA and HARGRAVE AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	9 November 2012
DATE OF JUDGMENT	8 February 2013
MEDIUM NEUTRAL CITATION	[2013] VSCA 10
JUDGMENT APPEALED FROM	Mackintosh v Johnson (Unreported, County Court of Victoria, Judge Misso, 11 November 2011)

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EQUITY - Unconscionable conduct – Relationship between man and woman – Money paid by man to or for the benefit of the woman - Whether man at special disadvantage at the time of the payments - Infatuation with the woman and ‘clouded judgment’ not sufficient to constitute special disadvantage – Whether payments were gifts – Appeal allowed – Orders of below judge set aside - Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; Louth v Diprose (1992) 175 CLR 621 applied and distinguished.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr P Crutchfield SC Ms B Tulloch	Jane Curtis & Associates
For the Respondents	Mr J Isles	Tolhurst Druce & Emmerson

THE COURT:

Parties and introduction

Richard Johnson and Kirsten Mackintosh had a brief intimate relationship. At the time, Mr Johnson was a long-divorced man aged 73, and Ms Mackintosh was a woman aged 45, in the course of separating from her husband, with a four year old child and two teenage children from a prior marriage. Although brief, the relationship was interspersed with separations and reconciliations.

Their relationship began with a sexual encounter in August 2008. By February 2009, Mr Johnson had paid Ms Mackintosh about $175,000 to support her business, and $480,000 to buy a house in her name as sole proprietor. All sexual relations ceased after 17 January 2009. Mr Johnson had given Ms Mackintosh the deposit on the house on that day.

The relationship finally broke down in April 2010. Mr Johnson then sued Ms Mackintosh in the County Court. He claimed (amongst other small claims) repayment of the $175,000 paid for the purposes of her business and a transfer to him of the house purchased in her name with his money. Mr Johnson claimed that he was entitled to that relief in equity, on three grounds: (1) unconscionable conduct, because he made the payments acting under a special disability, that Ms Mackintosh knew of that disability, and that she unconscientiously exploited it; (2) constructive trust, because he made the payments in the course of a joint endeavour with Ms Mackintosh and the basis of that joint endeavour, a continuing relationship between them, ceased to exist; and (3) equitable estoppel, because Ms Mackintosh promised she would live with him in the house if he paid for it and she unconscionably resiled from that promise.

By the time of trial, Mr Johnson was 76 years old and was dying from mesothelioma. He gave evidence from a hospital bed in Mackay and died three…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Mackintosh v Johnson

Details

AGLC: Mackintosh v Johnson [2013] VSCA 10
Case: [2013] VSCA 10
Decision Date: 8 February 2013

CaseChat Overview and Summary

The case of Mackintosh v Johnson reached the court, where the plaintiff sought to recover money paid to the defendant during their relationship. The trial judge had dismissed the plaintiff's claim, holding that the payments were not recoverable as gifts. Unsatisfied with this decision, the plaintiff appealed to the higher court, challenging the trial judge's conclusions on the nature of the payments and the applicability of equitable principles.

The central legal issue in this appeal was whether the trial judge correctly determined that the payments made by the plaintiff to the defendant were gifts. This required examining the nature of the relationship between the parties, the circumstances under which the payments were made, and whether the plaintiff was at a special disadvantage at the time of the transactions. Additionally, the court had to consider whether the plaintiff's infatuation and clouded judgment were sufficient to establish a special disadvantage, and if the payments were indeed gifts as found by the trial judge.

In addressing these issues, the court carefully reviewed the evidence and the reasoning of the trial judge. It was determined that the trial judge had misapplied the principles set out in Commercial Bank of Australia Ltd v Amadio and Louth v Diprose. The court found that while the relationship between the parties was close, the evidence did not support a finding that the plaintiff was at a special disadvantage, nor did it establish that the payments were gifts. The court held that the infatuation and clouded judgment did not constitute a special disadvantage in the legal sense required to set aside the transactions. Consequently, the appeal was allowed, and the orders of the trial judge were set aside.

The court's final orders were to reinstate the claim for the recovery of the payments made by the plaintiff to the defendant, subject to further evidence and arguments on the nature of the relationship and the circumstances of the payments. This decision underscored the importance of clearly establishing special disadvantage and the nature of transactions in claims of unconscionable conduct.

Orders